Peloton (NASDAQ:PTON) is getting crushed as demand uncertainty amid the reopening of the economy and a cut in guidance led investors to dump its stock. To be precise, Peloton stock has lost about 75% of its value in 2021, significantly underperforming the NASDAQ 100 Index.
What’s in Store for 2022?
Uncertain demand trends, tough year-over-year comparisons, supply-chain disruptions, and higher commodity prices could continue to hurt Peloton’s prospects in the near term.
Citing the challenges mentioned above, Peloton lowered its full-year guidance. Peloton expects its top line to be between $4.4 billion to $4.8 billion in FY22, lower than its previous forecast of $5.4 billion. Further, the company also reduced its subscription projections.
Peloton sees its connected fitness subscriptions ranging between 3.35 million to 3.45 million in FY22, down from its earlier expectations of 3.63 million.
Citing challenges for Peloton, Arpine Kocharyan of UBS maintained a Sell rating on Peloton stock. Kocharyan believes that Peloton could find it hard to drive subscriptions in FY22 and doesn’t expect the company to meet its subscriptions guidance despite the recent cut.
Meanwhile, the ongoing weakness in its business has led investors and hedge funds to dump Peloton stock. TipRanks’ Stock Investors tool shows that investors who hold portfolios on TipRanks have a very negative view of Peloton stock. The data shows that 3.5% of these investors have reduced their exposure to Peloton stock in the past 30 days.
Further, TipRanks’ Hedge Fund Trading Activity tool shows hedge funds have sold 1.7 million Peloton shares in the last 90 days.
However, Brad Gerstner of Altimeter Capital Management, LLC, which ranks third in the best hedge funds list on TipRanks, has increased his holding of Peloton stock.
Wall Street’s Take
Given the uncertain demand trends and supply-chain concerns, Wall Street is cautiously optimistic about Peloton stock. On TipRanks, PTON has received 11 Buys, 13 Holds, and 2 Sells for a Moderate Buy consensus rating.
Further, Peloton’s stock forecast and price targets on TipRanks show significant upside potential due to the recent pullback in its price. The average Peloton price target of $72.83 indicates 88.7% upside potential to current levels.
Disclosure: On the date of publication, Amit Singh had no position in any of the companies discussed in this article.
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